Download Economic Outlook 2009

National, State and Local
Economic Outlook
January 6th, 2009
The Business Cycle
Recent Business Cycle Data
REFERENCE DATES
Peak
Trough
Quarterly dates are in parentheses
DURATION IN MONTHS
Contraction
Expansion
Peak to Trough
Previous trough
to this peak
December
1969(IV)
November 1970 (IV)
11
106
November
1973(IV)
March 1975 (I)
16
36
January 1980(I)
July 1980 (III)
6
58
16
12
8
92
8
120
??
73
July 1981(III) November 1982 (IV)
July 1990(III)
March 1991(I)
March 2001(I) November 2001 (IV)
December
2007(IV)
??
Historical Business Cycle Data
REFERENCE DATES
DURATION IN MONTHS
Contraction
Expansion
Peak to Trough
Previous
Trough to
Peak
1854-2001 (32 cycles)
17
38
1854-1919 (16 cycles)
22
1919-1945 (6 cycles)
18
1945-2001 (10 cycles)
10
Average, all cycles:
27
35
57
U.S. Forecast
 U.S. Currently in a Moderate
Recession (not depression)
 12 months and counting…
 Recession: 2007Q4 to 2009Q2/Q3
 Housing, credit freeze, turmoil in
financial markets and volatile energy
prices have created an environment
that is toxic for economic growth.
U.S. Forecast
 Short-run threat of inflation
subsided:
 Energy prices – bubble has burst
 Inflation gone, but not
forgotten
 Extremely stimulative fiscal and
monetary policies
 Once recovery takes root prices could
rapidly rise
U.S. Forecast
 Fed has cut target interest rate to near
zero
 Quantitative easing
 Another stimulus package - $500
billion, $750 billion or even $1 trillion?
 Stimulus should be a cocktail of drugs to
fight the recession
 Rebate Checks
 Infrastructure
 Investment incentive
 Treasuries the latest bubble?
U.S. Economic Outlook
From IEC 4th Quarter 2008 Forecast
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
Gross Domestic
Product
% Chg, Annual Rate
2.8
-0.5
-3.5
-2.0
-0.4
0.5
Consumer Price Index
% Chg, Annual Rate
4.9
6.6
-8.1
-2.4
-1.5
1.3
59.8
53.8
47.3
48.2
-3.7
0.7
2.0
3.5
Oil - WTI
($ per barrel)
Total Consumption
% Chg, Annual Rate
123.8 118.1
1.2
-3.2
30-Year Mortgage Rates and Housing Starts
(Mortgage rates - Left axis, %)
8.5
2.5
8.0
2.0
7.5
7.0
1.5
6.5
6.0
1.0
5.5
5.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
30-Year Fixed Mortgage Rate
Housing Starts - Millions
0.5
Real GDP Growth and Federal Funds Rate
(%)
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Quarterly Growth Rate Real GDP
Fed Funds Rate
Manufacturing Employment
(Millions)
18.0
17.0
16.0
15.0
14.0
13.0
12.0
11.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Manufacturing Employment
Twin Deficits
(Billions of Dollars)
400.0
200.0
0.0
-200.0
-400.0
-600.0
-800.0
-1000.0
-1200.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
U.S. Federal Budget Surplus
Current Account
Automobile and Light Truck Sales
(Millions Vehicles)
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Auto Sales
Light Truck Sales
Industrial Production
(2002=100)
115.0
110.0
105.0
100.0
95.0
90.0
85.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Industrial Production
Total Nonfarm Payroll Employment
(Millions)
140.0
135.0
130.0
125.0
120.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Total Nonfarm Employment
Civilian Unemployment Rate
(%)
9.0
8.0
7.0
6.0
5.0
4.0
3.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Unemployment Rate
A look at the Florida
housing data:
November 2008
Snapshot
Florida Sales Report – November 2008
Single-Family, Existing Homes
Realtor Sales
Median Sales Price
Region or MSA
November
2008
November
2007
%Chg
November
2008
November
2007
%Chg
STATEWIDE
8,571
8,269
4
$158,300
$217,000
-27
Orlando
1,277
1,108
15
$167,900
$239,000
-30
Panama City
48
47
2
$190,000
$192,500
-1
Fort Walton Beach
127
155
-18
$191,300
$199,300
-4
Jacksonville
545
619
-12
$150,000
$178,200
-16
Tallahassee
100
137
-27
$170,000
$201,400
-16
Lakeland-Winter Haven
211
235
-10
$127,400
$158,900
-20
Florida Sales Report – November 2008
Single-Family, Existing Homes
Realtor Sales
Region or MSA
November
2008
STATEWIDE
8,571
8,269
Orlando
1,277
Fort Myers-Cape Coral
Median Sales Price
November
%Chg
2007
November
2008
November
2007
%Chg
4
$158,300
$217,000
-27
1,108
15
$167,900
$239,000
-30
600
365
64
$106,100
Marco Island
25
14
79
$262,500
$500,000
-48
Punta Gorda
174
154
13
$97,700
$177,300
-45
Miami
366
263
39
$224,700
$359,300
-37
Fort Pierce-Port St. Lucie
318
230
38
$130,500
$206,300
-37
$228,100
-53
Florida Sales Report – November 2008
Existing Condominiums
Realtor Sales
Region or MSA
November
2008
November
2007
STATEWIDE
2,278
2,474
Orlando
135
Pensacola
Median Sales Price
November
2008
November
2007
%Chg
-8
$130,600
$185,600
-30
125
8
$76,100
$140,600
-46
21
26
-19
$375,000
$225,000
67
Panama City
17
21
-19
$258,300
$260,700
-1
Jacksonville
60
78
-23
$131,400
$135,800
-3
Gainesville
14
36
-61
$133,300
$146,700
-9
Ocala
3
2
50
$108,000
-12
%Chg
$95,000
Florida Sales Report – November 2008
Existing Condominiums
Realtor Sales
Region or MSA
November
2008
November
2007
STATEWIDE
2,278
2,474
Orlando
135
Miami
Median Sales Price
November
2008
November
2007
%Chg
-8
$130,600
$185,600
-30
125
8
$76,100
$140,600
-46
308
297
4
$172,600
$264,700
-35
Fort Pierce-Port St. Lucie
49
44
11
$110,000
$170,000
-35
Melbourne-TitusvillePalm Bay
67
67
—
$113,800
$172,500
-34
Fort Lauderdale
442
430
3
$109,400
$166,700
-34
%Chg
A look at the housing
data:
January 1994 to
November 2008
Florida Forecast
Scenario for Florida Economy:
 Credit freeze further delayed real
estate recovery
 Recovery will finally start to take root in
2010
 Economy s-l-o-w-l-y gains momentum
 Short and Long run demographics of the
state have changed
Florida Real Gross State Product
(% change year ago)
10%
8%
6%
4%
2%
0%
-2%
-4%
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Florida & U.S. Unemployment Rate
(%)
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
FL Unemployment Rate
U.S. Unemployment Rate
Florida Housing Starts
(thousands)
300.0
8.5%
250.0
8.0%
7.5%
200.0
7.0%
150.0
6.5%
100.0
6.0%
50.0
5.5%
0.0
5.0%
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Total Private Housing Starts
30 year Mortgage Rates
Florida Employment
(Thousands)
8500.0
8000.0
7500.0
7000.0
6500.0
6000.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Wage & Salary Employment
Florida Construction Employment
(Thousands)
700.0
650.0
600.0
550.0
500.0
450.0
400.0
350.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Florida Professional & Business
Services Employment
(Thousands)
1400.0
1300.0
1200.0
1100.0
1000.0
900.0
800.0
700.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Florida Financial
Activities Employment
(Thousands)
550.0
500.0
450.0
400.0
350.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Florida Information Employment
(Thousands)
190.0
180.0
170.0
160.0
150.0
140.0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
2009-2011 Averages;
Q4 2008 Forecast
Region
Population Growth
Average % Chg
Rank
Florida
0.9
---
Deltona
0.9
6
Gainesville
1.0
5
Jacksonville
1.3
4
Lakeland
1.9
2
Miami
0.1
9
Naples
1.3
4
Ocala
2.2
1
Orlando
1.6
3
Palm Bay
0.7
7
Pensacola
0.4
8
Tallahassee
0.9
6
Tampa
0.9
6
2009-2011 Averages;
Q4 2008 Forecast
Region
Employment Growth
Average % Chg
Rank
Florida
-0.4
---
Deltona
-0.4
2
Gainesville
-0.6
4
Jacksonville
-0.9
6
Lakeland
-0.9
6
Miami
-0.9
6
Naples
-0.4
2
Ocala
-0.5
3
Orlando
0.2
1
Palm Bay
-0.8
5
Pensacola
-0.8
5
Tallahassee
-1.0
10
Tampa
-0.6
4
2009-2011 Averages;
Q4 2008 Forecast
Sector
Orlando
% Avg. Ann. Gr.
Educ.-Health Serv.
3.7
Other Serv.
2.3
Prof. & Bus. Serv.
0.7
Trade, Trans., Util.
0.3
State & Local
0.3
Leisure
0.2
Federal
0.2
Financial
0.0
Information
-1.3
Manufacturing
-4.5
Const. & Min.
-6.1
Thank you
Sean M. Snaith, Ph.D.
Director
Institute for Economic Competitiveness
(407) 823-1453
[email protected]
WWW.IEC.UCF.EDU